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Re: News Release - Tuesday, October 30, 2007
New Gold Inc. and Abacus Mining and Exploration Corp. Sign
Letters of Intent to Ensure Co-Operation in the Development of
Afton-Ajax Cu-Au District
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October 30 2007, Vancouver, British Columbia - New Gold Inc.
(NGD:TSX/AMEX) and Abacus Mining and Exploration Corp. (AME:TSX
Venture) are pleased to announce the completion of two Letters of
Intent ("LOI"), which are intended to ensure that each Company is able
to develop their respective assets, in the Afton-Ajax District,
(Kamloops, British Columbia, Canada) in a spirit of co-operation.

First of these is a 3-way Letter of Intent ("3 Way LOI") between New
Gold Inc. ("New Gold"), Abacus Mining and Exploration Corp. ("Abacus"),
and Teck Cominco Ltd. (TCK.A, TCK.B:TSX and TCK:NYSE) ("Teck Cominco")
which is intended to ensure that both New Gold and Abacus are able to
freely develop their own assets in the area of New Gold's New Afton
Project. In its transaction with Teck Cominco (the closing of which
was announced on October 25, 2007) New Gold acquired the surface rights
to the land required to develop its New Afton Project, and the water
pipeline which previously supplied the Afton open pit mine (and which
will now supply New Gold's New Afton project). Abacus announced the
closing of a transaction with Teck Cominco (November 25, 2005) in which
it is purchasing the old Afton mill building, the surface rights
surrounding that building, and the tailings facility from the old Afton
open pit mine, in addition to the rights of access for tailings lines
between the two areas.

Some of the land purchased by New Gold from Teck Cominco lies between
the old mill and tailings facility, and in the 3 Way LOI New Gold has
agreed to ensure Abacus maintains the rights of access previously
granted by Teck Cominco. The 3 Way LOI also provides Abacus with
shared use of New Gold's water pipeline, in the event that it develops
a new milling operation. This 3 Way LOI also provides New Gold with
access from the Trans-Canada Highway to its New Afton operations over a
small portion of the land which Abacus is purchasing from Teck Cominco
around the old Afton mill building.

In announcing this 3 Way LOI, Chris Bradbrook, President and CEO of New
Gold, stated: "New Gold and Abacus own important assets in close
proximity within the area of the New Afton mine site. This 3 Way LOI
ensures that both parties can develop their assets in a spirit of
co-operation and accommodation, without compromising the individual
plans of either Company. In the long term this will be beneficial to
the shareholders of both companies, the community of Kamloops, and the
long term development of mineralization in the district. I would also
like to acknowledge the co-operation of Teck Cominco, which made it
possible to reach the various agreements and understandings required
for both New Gold and Abacus to freely pursue their goals."

The second LOI is between New Gold and Abacus and is intended to ensure
that any economic mineralization within and surrounding the past
producing Ajax pits, is explored, delineated and developed in the most
effective manner. As a result the LOI is intended to grant Abacus an
option to explore for, and potentially develop, mineralization in the
area surrounding Abacus' Ajax Mineral Claims, which are over the
past-producing Ajax pits. Under this agreement Abacus must spend $2.5
million within 2 years over a portion of New Gold's mineral claims
surrounding the Ajax pits, and complete a preliminary economic study
within 6 months following the 2 year period. If economic
mineralization is established, it will be developed as a joint venture
between the 2 companies. In the event of an open pit operation the
interests will be 60:40 in favour of Abacus who will be the operator.
In the event of an underground operation the interests will be 60:40 in
favour of New Gold who will be the operator.

In announcing this second LOI, Chris Bradbrook stated, "Abacus has
announced a significant, 43-101 compliant resource beneath the Ajax
West pit, and is continuing a diamond drilling program to expand this
at depth, and to develop a resource in the Ajax East pit. Both pit
areas are enclosed by New Gold's mineral claims, and it is logical
therefore, that should an open pit operation be developed it would
encompass these claims. Our two companies have chosen to take a
co-operative approach to ensure any economic mineralization is
developed as efficiently and expeditiously as possible. New Gold is
focused on developing its New Afton Project into a mine. This LOI is
intended to allow our shareholders to participate in the exploration
and potential development of another area of mineralization within the
Afton-Ajax district, without diverting us from our primary focus. We
believe this is a win-win for the shareholders of New Gold and Abacus."


Enactment of the terms outlined in each LOI is contingent on the
execution of definitive agreements.

New Gold currently has approximately CDN$393 million in cash and short
term investments, (which includes its previously announced -- 16/8/07
-- holdings in Asset Backed Commercial Paper). The Company has 37
million shares outstanding.

For further information on New Gold Inc. and the New Afton Project,
please contact:

Chris Bradbrook
President and Chief Executive Officer
New Gold Inc.
601 -- 595 Howe Street, Vancouver, B.C. V6C 2T5
Tel: 877-977-1067 or 604-687-1629, Fax 604-687-2845
Email: invest@newgoldinc.com
Website: www.newgoldinc.com

Certain of the statements made and information contained herein is
"forward- looking information" within the meaning of the Securities Act
(Ontario) and Securities Act (Alberta) or "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of
1934 of the United States. Forward-looking statements are subject to a
variety of risks and uncertainties which could cause actual events or
results to differ from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties
relating to the interpretation of drill results and the estimation of
mineral resources and reserves, the geology, grade and continuity of
mineral deposits, the possibility that future exploration, development
or mining results will not be consistent with the Company's
expectations, metal recoveries, accidents, equipment breakdowns, title
matters and surface access, labour disputes or other unanticipated
difficulties with or interruptions in production, the potential for
delays in exploration or development activities or the completion of
feasibility studies, the inherent uncertainty of production and cost
estimates and the potential for unexpected costs and expenses,
commodity price fluctuations, currency fluctuations, failure to obtain
adequate financing on a timely basis and other risks and uncertainties,
including those described under Risk Factors Relating to the Company's
Business in the Company's Annual Information Form and in each
management discussion and analysis. Forward-looking information is in
addition based on various assumptions including, without limitation,
the expectations and beliefs of management, the assumed long term price
of copper and gold, that the Company will receive required permits and
access to surface rights, that the Company can access the total
required financing, appropriate equipment and sufficient labour and
that the political environment within British Columbia and Canada will
continue to support the development of environmentally safe mining
projects so that the Company will be able to complete the development
of the New Afton project. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in
forward-looking statements. Accordingly, readers are advised not to
place undue reliance on forward-looking statements.
WARNING: The Company relies upon litigation protection for
"forward-looking" statements.

Associated File:
http://www.newgoldinc.com/i/pdf/10-30-07_New_Gold_and_Abacus_LOI.pdf
27 KB in size, approx. 6 seconds to download at 56.6Kbps

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Copyright (c) 2007 NEW GOLD INC. (TSX/AMEX:NGD) All rights reserved.
For more information visit our website at http://www.newgoldinc.com/ or
send mailto:invest@newgoldinc.com
Message sent on Tue Oct 30, 2007 at 9:07:11 AM Pacific Time
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